While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

The proposed investment is expected to have limited environmental and social impacts which are site-specific, temporary and none are regarded to be significant. Those impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy. This categorization is in accordance with other similar type of projects within this sub-sector. The project is designed to avoid, minimize and manage environmental and social risks and impacts of the Company’s operations in compliance with national legal and regulatory requirements, applicable IFC Performance Standards and World Bank Group (WBG) General and sector-specific (Food and Beverage Processing Environmental, Health and Safety (EHS) Guidelines.

Key E&S issues applicable to this investment are: i) availability of environment, health and safety (EHS) and food safety management system and organizational and management performance of the company in relation to IFC Performance Standards, national regulatory requirements and relevant EHS guidelines,(ii) human resources policy and procedures & working conditions, (iii) occupational health and safety risk prevention and management including workplace safety and monitoring programs, (iv) pollution prevention measures (e.g. air emissions, liquid effluents, hazardous and non-hazardous wastes), (v) hazardous materials management; (vi) emergency preparedness and response programs; (vii) life and fire safety (L&FS) systems and their compliance; (viii) community engagement, (ix) energy efficiency and efficient water use and recycling options, (x) supply chain management and monitoring of forced/child labor use.

Since Chipita Turkey project site is acquired from and located within an Organized Industrial Zone, PS5 and PS6 are not applicable. No indigenous peoples are living in the project area and no significant cultural values are of concern, and thus PS7 and PS8 do not apply to this Project.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Chipita Turkey plant will be constructed in Gebze Plastic Manufacturers Organized Industrial Zone (hereafter referred to as “OIZ”) which is located on the TEM Motorway at a distance of 50 km from Izmit, 36 km from Istanbul and 36 km from the Center of Gebze Provincial District. The plant will be constructed as a 2-floor 12,000 m2 facility. The Company has signed an agreement with an internationally recognized snacks company with an established and strong distribution and sales network across Turkey for the exclusive distribution of their products.



Identification of Risks and Impacts: The Company’s proposed new operation have been evaluated against Annex I and Annex II of the Environmental Impact Assessment (EIA) regulation of Turkey, and was declared exempt from the full EIA process, as indicated in the correspondence from the Environment and Urbanization Provincial Directorate. However, the Company has obtained necessary and required provincial and regulatory certificates, permits and/or licenses through the management of OIZ (e.g. construction permit, letter of authorization from Ministry of Environment and Urbanization, sewage connection permit, life & fire Safety, including fire prevention system etc), copies of which have been reviewed during the due diligence process. Chipita Turkey’s construction phase is expected to be completed by the end of September 2013 as reported by the Company during the site visit. The Construction contractor for Chipita Turkey plant is Tekyapi A.S, a reputable construction company highly experienced in industrial plant construction. Tekyapi has an integrated management system certified by Bureau-Veritas certification body for ISO 9001, OHSAS 18001 and ISO 14001 standards. Tekyapi submitted their construction stage E&S risk assessments and implemented precautions during the site visit.



Going forward, as required in the attached ESAP, Chipita Turkey will conduct necessary assessments studies for impacts, including but not limited to noise, air pollution, effluent and waste management for the operation phase to be managed via an Environmental Monitoring Plan (EMP) that will be developed and implemented within the context of the corporate ESMS and will comply with local regulations and IFC’s PS1 requirements. As for the regular risk assessment studies performed at Lamia plants, Chipita Turkey will also conduct detailed risk analysis to identify major OHS risks and implement necessary mitigation measures to minimize those risks, as per the attached ESAP.



Environmental and Social Policies: Chipita S.A has a Codes of Business Conduct that encompasses overarching standards and rules including environmental protection, workplace occupational health and safety and corporate social responsibility to name a few. The Company requires full adherence to the principles of the Code by its suppliers and sub-contractors. As set forth in the attached ESAP, Chipita S.A will formalize its existing strong commitment and EHS
requirements in developing and adopting corporate EHS policies while making a direct reference and a commitment to comply with IFC Performance Standards and relevant WBG EHS Guidelines at existing and planned operations going forward.



Management Programs. All Chipita SA plants are audited by AIB International; an American food processing certification organization specialized in bakery. All plants have received passing scores and increased their production efficiencies in the last 2 years. Chipita S.A has not yet adopted a formal Quality, Environment, Occupational Health & Safety, and Food Safety Management programs at corporate or facility level. Going forward, as set forth in the attached ESAP, Chipita S.A’s senior management will design and implement an Integrated Environmental, Occupational Health and Safety Management System (ESMS), to be consistent with ISO 14001, OHSAS 18001 requirements, and in accordance with IFC PS1 and applicable WBG General and Sector-Specific Environmental, Health and Safety (EHS) Guidelines.



Organization. At the corporate level, Chipita S.A manages its operations in other countries through regional directorates and country managers. The plant operations which include technical, production, Research & Development (R&D) and quality assurance departments are overseen by corporate-level manufacturing director and R&D director. There is no separate plant-level EHS structure established for Lamia plants; environmental management is under the responsibility of Quality Assurance Department and carried out in line with local regulations. A safety engineer is appointed for the management of OHS issues.



As per its demonstrated commitment toward full integration of its EHS managements systems, and as set forth in the attached ESAP, Chipita SA will assign a corporate EHS coordinator whose functions will encompass overall EHS responsibilities, including the development of Chipita S.A corporate EHS policies and the Integrated EHS management system as mentioned above, as well as ensuring consistency on EHS management across the entire regional operations, including the corporate training program and Key Performance Indicators (KPIs) monitoring and reporting.



Training. Chipita S.A have adopted and implemented training procedure including vocational and specialization trainings to ensure continuous improvement of staff and operational efficiencies. In order to support the effective development and implementation of the integrated EHS management system mentioned above, a comprehensive EHS training program for all employees and contractors of Chipita Turkey will be established with IFC’s PS1 requirements and Turkish legislation as described in the ESAP.



Emergency preparedness and response plan. The Company will prepare an Emergency Response Plan that addresses the responsibilities of the emergency response team, and specific emergency response actions for each emergency situation (accident, earthquake, fire, storm,
road accident and spill) based on the final arrangement with contractors for the construction phase, and reflecting the final operational settings for the operational phase. This is being outlined in the attached ESAP.



Monitoring and Reporting. Considering the limited and site-specific environmental and social impacts from its operations, Chipita SA has not yet defined a comprehensive corporate EHS monitoring and reporting system procedure. This being said, the facilities in Greece are managed through strict compliance with EU legislations and national regulatory requirements with comprehensive and detailed measurements (waste water, air emissions, OHS accident rate). Going forward, the operations of Chipita Turkey will be monitored from the Chipita SA headquarters in Greece with a centralized monitoring and reporting system to be established. Chipita Turkey will also define Key Performance Indicators (KPIs), such as lost time incidence frequency rate (LTIFR), accident free days, energy consumption, dust emissions, noise levels, employee and community complaints, solid and hazardous waste generation in order to monitor on a periodical basis and hence will develop an E&S monitoring program as part of its overall ESMS development in line with IFC’s PS1 requirements as per the attached ESAP. The results will be reported to senior management for review and action as well as IFC on a regular basis. The Company will also report annually to relevant Turkish authorities and IFC as part of the Annual Monitoring Report (AMR).



Supply chain. The principal raw materials used are flour, sugar, cacao, sunflower oil, vanillin and packaging film (polypropylene). Cacao is imported from Ivory Coast and the approximate quantity is 4,800 ton for Chipita SA productions in 2012. Chipita SA will continuously assess its suppliers in terms of labor (harmful child / forced labor) and environmental (biodiversity related risks associated with conversion of natural/critical habitats) risks, in addition to quality assessment system. In case of a supplying country or a region with a high risk of harmful child labor, forced labor, or deforestation, the Company will search for new suppliers to avoid as much as the above mentioned risks. Supply chain risk assessment and management will be enhanced as outlined in the ESAP. According to IFC specialist’s assessment, cacao supply from Ivory Coast merits attention as it may carry harmful child labor risks and deforestation risks respectively. Chipita SA will use best commercial efforts to mitigate these issues in their supply chain and report specific data in the supply chain management system reporting.



External Communications and Community Grievance Mechanisms: Chipita SA has internal and external communication procedures and has established a call center to effectively address customer concerns and complaints. These practices will be replicated for the newly constructed Chipita Turkey facility. A formalized community griev
ance mechanism for all Chipita SA facilities regarding the requirements of IFC’s PS requirements will be established, as indicated in the ESAP.

Human Resource Policy and Management. Chipita SA currently employs 5,545 employees in its 14 plants located in Greece, Bulgaria, Romania, Poland, Russia, Egypt, Saudi Arabia, Nigeria and Mexico. Plant manager as well as Finance and Marketing Managers of Chipita Turkey will be appointed from Greece and the rest of the staff will be recruited through local human resources firms. This new facility in Turkey is expected to create direct employment for approximately 170 people. Currently, Human Resources management at the plant level is overseen by the HR manager who indirectly reports to the Corporate HR Director. A set of HR procedures have been drafted at the corporate level and HR departments at each country either directly adopts the policy as it is or adapts the policy to meet the specific needs of the operating country in which case the procedure is subject to the approval of the corporate HR director.

Corporate level HR policy for Chipita S.A, including explicit reference to freedom of association, non-discrimination, equal opportunity, fair grievance mechanism and OHS provisions will be integrated into the operations of Chipita Turkey. Direct and contractor workers will be informed of this policy in line with local law and IFC’s PS2 requirements, as described in the ESAP.



The base salary payment for the facilities in Greece is reported as 1000 Euro, which is above the national minimum wage of 680 Euro. Other benefits are provided, including complementary pension funds, private health coverage, seniority, risk and performance bonus, extra hours payment, transport, subsidized meals, payment of school fees (primary and secondary level), special religious celebrations, etc.



There is no discrimination on the basis of personal beliefs, sex or characteristics, and there is no prohibition or discouragement of freedom of association.



Retrenchment: Chipita SA does not anticipate a reduction in the current workforce; in fact the new project in Turkey will create new employment opportunities thus will increase the overall corporate employment figure. However, if collective dismissals become necessary in future, Chipita SA will prepare a retrenchment plan based on consultations with the affected workers, the workers’ labor unions and in accordance with local Labor Codes and IFC’s PS2 requirements.



Workers Organization and Grievance Mechanism: The employees at Lamia facilities are not represented by a union, however Chipita SA explicitly support the freedom of association of its workers. The Company does not have a formalized grievance mechanism although the open door policy allows employees to raise and register their concerns. Going forward, as set forth in the ESAP, a grievance procedure, for the Company employees to express their grievances and protect their rights regarding working conditions and terms of employment will be established as per IFC’s PS2 requirements. Direct employees as well as temporary employees, contractors and ser
vice provider’ workers will be made aware of the grievance mechanism procedure during the induction training session.



Occupational Health and Safety (OHS). Chipita Lamia has well documented and implemented procedures for occupational health, safety. Topics include periodical inspections, management review, incidents, workplace safety, safety signs, personal protective equipment, work permits, risk assessments, emergency preparedness and plans, housekeeping, and access roads. The Company will develop an OHS management system applicable to its all operations, including the key elements such as a permit to work system, lock out tag out procedures, chemical management to ensure prevention of accidental release and use/installation of secondary containments, monitoring of exposure to vibration.

Each year in February, Chipita Lamia facilities go under a general maintenance for the equipment and machinery. Chipita Turkey will also develop a preventive maintenance program applicable to all machines and equipment used in the workplace and will ensure high risk equipment (boilers, forklifts, lifts, machine guards, etc.) are periodically checked and certified by external authorized agencies to confirm their safe operation.

The construction company Tekyapi A.S has designated a full time EOHS engineer on site for continuous monitoring and implementation of environment and OHS practices. Tekyapi’s corporate EOHS coordinator also performs monthly supervision visits. All construction site workers are required to undergo initial safety training prior to starting work. Tekyapi also performs regular audits and inspections in order to monitor mitigation measures, such as use of personnel protective equipment, work equipment improvement, training, etc. related with the workplace risks. Occupational health and safety rules and other working conditions, in accordance with the IFC PS2 requirements, will be included in contractor agreements. In addition, Chipita Turkey will establish regular inspection mechanisms to ensure compliance of contractors with the contractual requirements. Tekyapi has 13 subcontractors and it ensured that all subcontractor employees are registered in the social security system and all social benefits are provided including food, transportation and accommodation, when necessary. At the time of the site appraisal, there were 78 construction workers and appropriate hygiene and safety standards were applied to workers’ accommodation units. There have been no lost-time incidents since the construction started.

All Chipita SA facilities operate according to hygienic design principles and this practice will be replicated for Chipita Turkey plant. The Company will undertake risk assessments for the machinery and equipment before operation commences, as per the attached ESAP.



Life and fire safety. All life and fire safety related aspects of the Chipita Turkey plant design are compatible with the local building codes and fire department reg
ulations. Warehouses and high risk zones are equipped with sprinkler systems and fire detection and alarm systems are designed for all other areas. The roof of the plant is constructed with flame retardant rock wool insulation on the polyurethane layer to enhance fire safety. Three fire pumps and a water storage tank with 150 m3 capacity is available at the construction site. Safety of personnel during seismic activities is a key issue for the project as it is situated in the active seismic zone. The Group ensured that structural elements of the Chipita Turkey building were designed in accordance with regulations for the construction in active seismic zones, including Turkish Earthquake Resistant Design Code (2007); automatic firefighting system is designed and installed; and an evacuation plan is developed.

Energy use and greenhouse gas emissions. Types of energy sources used in the Lamia facilities are electricity and natural gas for production. Electricity is obtained from the city network. The electricity for the Chipita Turkey operations will be obtained from the industrial zone network. The electric energy of 154 kV obtained from the national interconnected network is distributed to the manufacturers through the transformer buildings provided within the Organized Zones Internal Network after it is reduced to 34.5 kV. The operation of electric network as well as its maintenance and repair are carried out by Organized Industrial Zones Directorate.



All equipment and machinery were chosen based on EU Standard and energy efficient machinery was preferred. After production starts, the Company will undertake an energy efficiency assessment against industry benchmarks, as outlined in the WBG’s EHS sector specific guidelines and to monitor its carbon footprint.



Air emissions monitoring. Going forward, as set forth in the ESAP, Chipita Turkey will monitor on an annual basis stack air emissions from its boiler and generators to ensure consistency with WBG EHS Guidelines for point source emissions to air and will report them in the IFC Annual Monitoring Report.



Water use and efficiency. Water for Chipita Turkey operations will be sourced from the wells belonging to the Organized Industrial Zone under a subscribed consumer agreement made with the OIZ. Water will be chlorinated before its use at processing units and the quality of water will be continuously checked in regular intervals, through biological and chemical analyses performed by an accredited laboratory.After production starts, the Company will undertake a water efficiency assessment in order to assess efficiency against industry benchmark as outlined in the WBG’s EHS sector specific guidelines.



Wastewater Treatment. Plants in Lamia discharge its wastewater to a central industrial waste water treatment plant. EU discharge limits are in line with IFC requirements. Chipita Turkey’s waste water will be treated at industrial zone’s waste water treatment plant and will be subsequently discharged to the municipality’s collection network. An oil/grease separator has been installed at the project site before the collection point. Chipita Turkey will ensure that its waste water quality is in line with the acceptance limits of the Industrial Zone as well as Turkish environmental laws and WBG EHS Guideline requirements. Chipita Turkey will provide waste water amount and effluent quality data to IFC via the Annual Monitoring Report to ensure compliance with national law and the effluents parameters found in WBG EHS Guidelines for food and beverage processing.



Management of solid and hazardous wastes. Waste from Chipita Lamia facilities are mostly characterized in domestic waste (710 ton/year), paper and cardboard (130 ton/year), product waste (260 ton/year), corn oil (40 ton/year) and mine
ral oil (400kg/year). Collection and sorting are located at site and product waste is utilized in the biomass plant within the premises. Packaging waste is recycled and waste oil is recovered and disposed by licensed services providers. Procedures have been established for the management of solid and hazardous wastes. An appropriate diesel tank containment unit has been designed for Chipita Turkey facility. Chipita Turkey will develop a waste management program applicable to the operation phases in accordance with Good International Industry Practices and will report on types of wastes, sources, amounts and appropriate disposal methods to deal with solid waste, hazardous waste and domestic sanitary waste via the Annual Monitoring Report.

ommunity Health and Safety: Chipita Turkey will be located in the industrial zone thus there are potentially limited impacts on surrounding communities.



Chipita Turkey will have an active grievance mechanism for the customer complaints and will regularly monitor the number and root cause of complaints and under the scope of Good Manufacturing Practices and food safety system. Traceability practices and product recall procedures will be available in case of any need.



Emergency Preparedness and Response. The protection of the social facilities of OIZ Directorate as well as the factories against any risk of fire is ensured by 74 fire hydrants placed at regular intervals on the Zone’s roads and by 2 fire engines and fire-fighters ready to serve 24 hours a day.



Community Grievance Mechanism. In order to ensure a corporate responsiveness on potential grievances, aside from handling customers’ complaints, the Company will define and adopt a community grievance mechanism, as indicated in the attached ESAP, to strengthen its consultation and responsiveness with any potential communities’ grievances on the E&S risks associated with its operations.



Security Personnel. All Chipita SA facilities contract licensed service providers for security purposes. The contracted security officers are not armed and are trained for defensive measures. The security of Chipita Turkey will be ensured by the trained and certified security forces of the Organized Industrial Zone.

Given the limited potential for adverse social and environmental impacts arising from the project, community engagement is not required by the local authorities for a facility like Chipita Turkey.

Publication of this ESRS and associated Environmental and Social Action Plan (ESAP) constitutes the client’s first community engagement related to its project plans. The information about the Project will be shared with the community through publishing this Environmental and Social Review Summary (ESRS) and the relevant E&S action plan in local language.

The ESRS and the attached ESAP will be made available via the World Bank Group’s InfoShop. Chipita SA will be requested to place this ESRS on its website (http://www.chipita.com) or disseminate through local press to inform the public of the results of IFC’s environmental and social review and ESAP’s corrective action items.
Contact Person
Chipita Gida Uretim A.S.
Ms. Kiriaki Vasiliadou
Saray Mah. Dr. Adnan Buyukdeniz Cad. No:4
Akkom Office Park 2. Blok K:10
34768 Umraniye Istanbul
Tel: +90 216 250 3203
Fax: +90 216 250 3273
mailto:kirvas@chipita.com

Plant Address
Chipita Gida Uretim A.S.
Gebze Plastic Producers Organized Industry Zone,
Cumhuriyet Caddesi, 11
Gebze Kocaeli

Broad Community Support is not applicable for this project

Action	Timetable
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Chipita SA will define and implement a corporate EHS Policy which will apply to its existing and future operations complying with legal and regulatory requirements of the host country as well as IFC Performance Standards and WBG EHS Guidelines.	Mar-14
Chipita Turkey will apply and obtain from the local authorities all necessary operational permit and licenses	Prior to start-up
Chipita SA will design and implement an Integrated Environmental, Occupational Health and Safety Management System(ESMS) to be consistent with ISO 14001, OHSAS 18001 and HACCP/ISO 22001 and in accordance with IFC PS1 requirements to be reviewed and approved by IFC, defining roles and responsibilities, and other necessary elements (manual procedures) to enable it to comply with local laws and regulations, IFC Performance Standards and applicable WBG’s Environmental, Health and Safety Guidelines.	Dec-14
Chipita SA will appoint an EHS coordinator who will be responsible for implementing corporate ESMS and fulfilling the ESAP conditions	Mar-14
Chipita Turkey will develop a comprehensive EHS training program, including technical terms for quality, environment and safety as well as OHS risks of each job	Dec-14
Chipita Turkey will prepare an Emergency Preparedness and Response Plan that addresses the responsibilities of the emergency response team, and specific emergency response actions for each emergency situation (accident, earthquake, fire, road accident and spill) reflecting the final operational settings for the operational phase.	Dec-14
Chipita Turkey will develop an extensive EHS monitoring program, including monitoring of air emissions, solid wastes, effluents and occupational accidents, trainings, effectiveness of the management program, as well as compliance with any relevant legal and/or contractual obligations and regulatory requirements	Mar-14
Chipita Turkey will conduct detailed risk analyses in scope of the management system to identify major OHS risks and implement necessary mitigation measures to minimize those risks	Prior to start-up
As part of the ESMS, Chipita SA will develop and implement procedures to ensure compliance of suppliers with IFC PS1, PS2 and PS6’ supply chain related requirements. These procedures will include:	When new commodity or country selected
Develop and implement written procedures to identify harmful child labor, forced labor, and biodiversity issues related to farmer encroachment into protected areas or areas of high biodiversity.	Jun-14
Agreement with suppliers: include provisions into agreements with suppliers to ensure no child labor, no forced labor, and no issues related to biodiversity or land disputes for the renewed contracts.	Dec-14
A formalized community grievance mechanism for all Chipita Turkey facilities regarding the requirements of IFC’s PS requirements will be established	Dec-14
PS2: Labor and Working Conditions
Chipita Turkey will develop a Human Resources policy applicable to both direct and contractor employees to include all of the key requirements of IFC’s PS2 on labor and working conditions (e.g. Non-discrimination, freedom of association and collective bargaining, child labor and forced labor)and will communicate to all employees	Before 1st disbursement
Chipita Turkey will develop a formal employees’ grievance mechanism and will give training to workers on how the mechanism works and will ensure that communication channels works efficiently between all levels of employees	Dec-14
Chipita Turkey will develop and implement a procedure for monitoring compliance of contractors with PS 2 requirements.	Prior to contractor work for the facility
Chipita Turkey will develop an OHS procedures, including the key elements such as a permit to work system, lock out tag out procedures, chemical management to ensure prevention of accidental release and use/installation of secondary containments, monitoring of exposure to vibration	Mar-14
Chipita Turkey will develop a preventive maintenance program applicable to all machines and equipment used in the workplace and will ensure high risk equipments are periodically checked and certified by external authorized agencies to confirm their safe operation	Dec-14
PS3: Resource Efficiency and Pollution Prevention
Chipita Turkey will undertake a study in order to assess energy and water use efficiency against industry benchmarks as outlined in the WBG’s EHS sector specific guidelines and to monitor its carbon footprint.	AMR reporting - ongoing
Chipita Turkey will monitor on an annual basis stack air emissions from its boiler and generators to ensure consistency with WBG EHS Guidelines for point source emissions to air and will report them in the IFC Annual Monitoring Report.	AMR reporting - ongoing
Chipita SA will develop a waste management plan, including the types of wastes, sources, amounts and appropriate disposal methods to deal with solid waste, hazardous waste and domestic sanitary waste in accordance with Good International Industry Practices.	AMR reporting - ongoing
PS4: Community Health, Safety and Security
Chipita SA will develop and implement a community engagement procedure to be included into the ESMS, including a mechanism for receiving, addressing and resolving community grievances and complaints in line with IFC’s requirements	Jun-14